N.Y. Times buying half of Discovery Civilization

$100 million is the price of 50% stake in the digital cable channel

April 06, 2002|By BLOOMBERG NEWS

NEW YORK - New York Times Co., publisher of its namesake newspaper, agreed yesterday to buy a 50 percent stake in Discovery Communications Inc.'s Discovery Civilization digital cable-television channel for $100 million.

The companies will develop the channel under a joint venture, they said in a statement. They also agreed that Discovery Communications, 49 percent owned by Liberty Media Corp., will buy $40 million of programming from the Times Co.'s production unit in the next five years.

The publisher has tried to broaden its audience through television and the Internet, and has co-produced programs with Discovery Communications such as Trauma: Life in the ER. The New York-based company also has sought to use television to increase its brand-name recognition and reputation during the past several years, producing programs aired on channels such as Discovery Civilization and the National Geographic channel.

"This is not going to be a great big money maker; it's more likely an image enhancer," said Dennis McAlpine, a media analyst with McAlpine Associates. "It's going to be a long time before the digital channels get enough carriage and awareness to make a lot of money."

Discovery Civilization Channel, a network with programs on history and world cultures, is available in 14 million U.S. homes. Digital cable television, a relatively new service, has fewer subscribers than regular cable. Comcast Corp., for example, has 2.34 million digital subscribers among its 8.47 million customers.

Discovery Communications also runs cable networks such as the Discovery Channel, Animal Planet and the Travel Channel. Times Co. also owns eight network-affiliated television stations and two New York-based radio stations.

Discovery Communications and Times Co. will use the venture to expand the channel's distribution and will cross-promote it through media such as newspapers, they said. The channel will have a board with three Discovery Communications executives and two New York Times officials, the statement said.

Shares of New York Times Co. rose 46 cents yesterday to $47.68. Liberty Media's shares rose 17 cents to $12.34.

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